BlockBeats News, April 8th. The market underwent a dramatic shift from “comprehensive upgrade risk” to a “two-week ceasefire window” in a short period of time. On the surface, Iran’s acceptance of a ceasefire and the expectation of the Strait of Hormuz reopening have marginally eased the extreme impact on energy supply. However, from the decision-making process perspective, this shift is not based on the end of conflict but rather on temporary concessions driven by political pressure, the need for financial market stability, and negotiation gamesmanship, implying that the supply risk has only been postponed rather than eliminated. At the same time, the Federal Reserve continues to emphasize the risk of inflation trending higher and a weakening job market internally, indicating that the policy environment is still in a “passive response to the supply shock” state.
From a policy and international response perspective, structural divergences are widening. On the one hand, Federal Reserve officials have reached a consensus on the energy shock driving inflation higher, maintaining the logic for keeping interest rates elevated. On the other hand, Japan has seen wages reach a multi-decade high, strengthening its expectations of interest rate hikes, implying that the world’s major economies are concurrently tightening liquidity. This “non-coordinated tightening,” coupled with geopolitical uncertainty, has prevented the market from forming a stable interest rate expectation anchor. Meanwhile, attacks on Russian energy facilities and Iran retaining the bargaining chip of closing the strait indicate that the energy supply chain remains highly fragile, with any event capable of triggering a price surge.
